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109.03.4-B. American Dream Downpayment Initiative (ADDI)/HOME Program.

AR ADC 109.03.4-BArkansas Administrative Code

West's Arkansas Administrative Code

Title 109. Development Finance Authority

Division 03. Single Family Housing

Rule 4. Down Payment Assistance Loans (Refs & Annos)

Ark. Admin. Code 109.03.4-B

109.03.4-B. American Dream Downpayment Initiative (ADDI)/HOME Program.

Currentness

President Bush signed the American Dream Down payment Initiative (ADDI) into law on December 16, 2003, under the American Dream Down payment Act (Public Law 18-186) (ADDI statute). Funds made available under the ADDI statute will be allocated to eligible HOME Investment Partnerships Program participating jurisdictions (PJ) to assist low-income families become first-time homebuyers.

Goals of the ADDI Program include increase overall homeownership rate, create greater opportunity for homeownership among lower income and minority households, and revitalize and stabilize communities.

ADFA will provide the ADDI/HOME Program funds in the form of a forgivable loan (second mortgage) at a maximum of $10,000 for down payment and closing costs in conjunction with ADFA's HomeToOwn Mortgage Revenue Bond Program. The ADDI/HOME Program forgivable loan is accessible through the Internet Reservation System. The assistance will be forgiven in equal annual installments over the five-year affordability period for qualified borrowers who have maintained the home as their principal residence. The documents for this program will include a note, mortgage, assignment and ADDI/HOME Agreement.

If the home is pre-1978 built, lead-based paint may need to be addressed and the HOME staff will work with the first-time homebuyers in making the home free of any lead-based paint by placing another forgivable loan on the property with an affordability period attached to it also. Documents will include a note, mortgage and Lead-based Paint HOME Agreement. All of these documents will be available through the Internet Reservation System.

Requirements of the ADDI/HOME Program that must be attained include:

1. A first-time homebuyer is an individual or a married person who along with their spouse who have not owned a home for the past three years. Borrower(s) must furnish the most recent 3 years tax returns with W-2's attached to the lender and Verification of Rental for the past three years. This includes both targeted and non-targeted counties.

2. The first time homebuyer's income cannot exceed 80% of area median income for all seventy-five counties throughout the State of Arkansas. Income limits are adjusted for the total number of persons who will occupy the residence. (See ADDI/HOME Program Exhibit A. Updated annually)

3. Homebuyer(s) must complete an 8-hour Homebuyer Counseling Course from an ADFA approved counselor.

4. Under ADDI eligible property types include, single-family housing (1-4 family residence), condominium unit, or combination of manufactured housing attached to real estate property. The unit must meet all applicable State and local housing quality standards, and the Model Energy Code. The purchase price cannot exceed the HUD 203 (b) Mortgage Limits.

5. The borrower(s) must own, maintain, and occupy this home as their principal residence. The borrower must occupy the home within 60 days of closing the loan.

6. A Housing Quality Standard (HQS) Inspection will be conducted on all homes by ADFA Inspectors. This inspection will be done on all homes that are using the ADDI/HOME Program. This is NOT a home inspection. If repairs are needed, lender must review and discuss “Acknowledgment of Repairs” sent by ADFA underwriter with borrower(s). The Acknowledgment of Repairs must be signed by lender and borrower(s) and sent to ADFA underwriter.

7. Only one down payment assistance loan can be obtained for a qualified buyer from ADFA. If the person's income qualifies for the ADDI/HOME Program that is great but if they are over the income limit, then the regular ADFA Down Payment Assistant (DPA) loan can be used.

8. The borrower(s) will be subject to an affordability period of years based upon the amount of assistance received from the ADDI/HOME Program. If the home is not maintained and sold before the affordability period is up, there will be recapture of HOME subsidy.

Affordability Periods
Home Subsidy	Affordability Period
Less than $ 15,000	5 years
$ 15,000 - $ 25,000	10 years

9. If the home to be purchased was built pre-1978, lead-based paint may be present and additional HOME funds may be used in conjunction with HOME Program to rehabilitate or eliminate identified lead-based paint hazards. A Lead-Based Paint Risk Assessment Inspection will occur by ADFA Inspectors to determine if the home has any lead-base paint hazards and cost will be determined based on the Risk Assessment findings. Other financing will then be discussed with the first-time homebuyer through the HOME Department Staff.

10. Borrower(s) and lenders will review and sign the ADDI/HOME Program Notice to Homebuyer. The original will be sent to ADFA in the compliance package. Applicable fee is the $50 “ADDI 2nd Mortgage Lender Processing Fee”.

11. A one-time ADFA Vendor Setup Sheet and W-9 form is required in order for ADDI funds to be released from HUD so ADFA may purchase loan from the lender. These forms may be requested from a Single Family Underwriter.

12. Closing requirements:

• The ADDI/HOME Subordinate mortgage must be recorded in the official public records of the County Recorder's Office such that it constitutes a valid second lien upon the property.

• ADDI/HOME Program Assignment of subordinate mortgage must be recorded in the official public records of the County Recorder's Office.

• ADDI/HOME Program Homebuyer Assistance Agreement must be recorded in the official public records of the County Recorder's Office.

• Hazard insurance policy must show the Mortgage Lender and/or its assigns as an insured second mortgagee.

• Title insurance policy must reflect the ADDI/HOME subordinate mortgage as a valid lien against the property.

• Copy of flood certification must be provided.

• Mortgage Lender advances the funds and is reimbursed by ADFA upon receipt of the original signed ADDI/HOME Program Note and copy of the RECORDED ADDI/HOME Subordinate Mortgage.

• The ADDI/HOME loan will be assigned to Arkansas Development Finance Authority.

13. Servicing Requirements:

ADDI/HOME Program Loans:

• ADDI/HOME Loans will be serviced by ADFA Loan Servicing Department.

• Assumptions are not allowed.

• There is an affordability period that varies with the ADDI/HOME loan amount.

• Lender must provide to ADFA Single Family, final RECORDED documents that include:

a. Original Recorded ADDI/HOME Program Subordinate Mortgage

b. Original Recorded Assignment of ADDI/HOME Program Subordinate Mortgage

c. Original Recorded ADDI/HOME Program Homebuyer Assistance Agreement

HOME Lead Base Paint Loans:

• All documentation pertaining to lead base paint loans are to be sent to the HOME Department at ADFA.

	AMERICAN DREAM DOWNPAYMENT INITIATIVE (ADDI)/HOME PROGRAM
		in conduction with the Single Family HomeToOwn Program

			HUD HOME PROGRAM INCOME LIMITS 04/2007
		NUMBER OF PERSONS/MAXIMUM HOUSEHOLD INCOME AT 80% OF MEDIAN INCOME

N/T	COUNTY NAME	1	2	3	4	5	6	7	8

N	Arkansas	23900	27300	30750	34150	36900	39600	42350	45100
N	Ashley	24550	28100	31600	35100	37900	40700	43500	46350
N	Baxter	22750	26000	29250	32500	35100	37700	40300	42900
N	Benton	29750	34000	38250	42500	45900	49300	52700	56100
N	Boone	23150	26500	29800	33100	35750	38400	41050	43700
T	Bradley	22600	25850	29050	32300	34900	37450	40050	42650
T	Calhoun	22800	26050	29300	32550	35150	37750	40350	43000
N	Carroll	22600	25850	29050	32300	34900	37450	40050	42650
T	Chicot	22600	25850	29050	32300	34900	37450	40050	42650
T	Clark	24450	27950	31450	34950	37750	40550	43350	46150
N	Clay	22600	25850	29050	32300	34900	37450	40050	42650
T	Cleburne	24300	27750	31250	34700	37500	40250	43050	45800
N	Cleveland	25550	29200	32850	36500	39400	42350	45250	48200
T	Columbia	23900	27350	30750	34150	36900	39650	42350	45100
T	Conway	24650	28150	31700	35200	38000	40850	43650	46450
N	Craighead	26300	30100	33850	37600	40600	43600	46600	49650
T	Crawford	25300	28950	32550	36150	39050	41950	44850	47750
T	Crittenden	32100	36700	41250	45850	49500	53200	56850	60500
T	Cross	22600	25850	29050	32300	34900	37450	40050	42650
T	Dallas	22600	25850	29050	32300	34900	37450	40050	42650
T	Desha	22600	25850	29050	32300	34900	37450	40050	42650
T	Drew	24250	27700	31200	34650	37400	40200	42950	45750
N	Faulkner	31650	36150	40700	45200	48800	52450	56050	59650
N	Franklin	24000	27400	30850	34250	37000	39750	42450	45200
N	Fulton	22600	25850	29050	32300	34900	37450	40050	42650
N	Garland	25050	28600	32200	35750	38600	41450	44350	47200
N	Grant	27900	31900	35850	39850	43050	46250	49400	52600
N	Greene	24450	27900	31400	34900	37700	40500	43300	46050
N	Hempstead	22600	25850	29050	32300	34900	37450	40050	42650
N	Hot Spring	24450	27900	31400	34900	37700	40500	43300	46050
N	Howard	22850	26100	29400	32650	35250	37850	40500	43100
N	Independence	25100	28700	32250	35850	38700	41600	44450	47300
N	Izard	22600	25850	29050	32300	34900	37450	40050	42650
N	Jackson	22600	25850	29050	32300	34900	37450	40050	42650
T	Jefferson	25550	29200	32850	36500	39400	42350	45250	48200
N	Johnson	22600	25850	29050	32300	34900	37450	40050	42650
T	Lafayette	22600	25850	29050	32300	34900	37450	40050	42650
N	Lawrence	22600	25850	29050	32300	34900	37450	40050	42650
T	Lee	22600	25850	29050	32300	34900	37450	40050	42650
T	Lincoln	25550	29200	32850	36500	39400	42350	45250	48200
N	Little River	23600	26950	30350	33700	36400	39100	41800	44500

			HUD HOME PROGRAM INCOME LIMITS 04/2007**
		NUMBER OF PERSONS/MAXIMUM HOUSEHOLD INCOME AT 80% OF MEDIAN INCOME

N/T	COUNTY NAME	1	2	3	4	5	6	7	8

N	Logan	22600	25850	29050	32300	34900	37450	40050	42650
N	Lonoke	31650	36150	40700	45200	48800	52450	56050	59650
T	Madison	29750	34000	38250	42500	45900	49300	52700	56100
N	Marion	22600	25850	29050	32300	34900	37450	40050	42650
N	Miller	26100	29850	33550	37300	40300	43250	46250	49250
T	Mississippi	22600	25850	29050	32300	34900	37450	40050	42650
T	Monroe	22600	25850	29050	32300	34900	37450	40050	42650
N	Montgomery	22600	25850	29050	32300	34900	37450	40050	42650
T	Nevada	22600	25850	29050	32300	34900	37450	40050	42650
N	Newton	22600	25850	29050	32300	34900	37450	40050	42650
T	Ouachita	23250	26550	29900	33200	35850	38500	41150	43800
T	Perry	31650	36150	40700	45200	48800	52450	56060	59650
T	Phillips	22600	25850	29050	32300	34900	37450	40050	42650
N	Pike	22600	25850	29050	32300	34900	37450	40050	42650
N	Poinsett	22600	25850	29050	32300	34900	37450	40050	42650
N	Polk	22600	25850	29050	32300	34900	37450	40050	42650
N	Pope	25500	29100	32750	36400	39300	42200	45150	48050
T	Prairie	23750	27100	30500	33900	36600	39300	42050	44750
N	Pulaski	31650	36150	40700	45200	48800	52450	56050	59650
N	Randolph	22600	25850	29050	32300	34900	37450	40050	42650
T	St. Francis	22600	25850	29050	32300	34900	37450	40050	42650
N	Saline	31650	36150	40700	45200	48800	52450	56050	59650
T	Scott	22600	25850	29050	32300	34900	37450	40050	42650
T	Searcy	22600	25850	29050	32300	34900	37450	40050	42650
N	Sebastian	25300	28950	32550	36150	39050	41950	44850	47750
N	Sevier	22700	25900	29150	32400	35000	37600	40200	42750
N	Sharp	22600	25850	29050	32300	34900	37450	40050	42650
N	Stone	22600	25850	29050	32300	34900	37450	40050	42650
N	Union	24350	27850	31300	34800	37600	40350	43150	45950
N	Van Buren	22600	25850	29050	32300	34900	37450	40050	42650
N	Washington	29750	34000	38250	42500	45900	49300	52700	56100
T	White	25150	28750	32350	35900	38800	41650	44550	47400
T	Woodruff	22600	25850	29050	32300	34900	37450	40050	42650
T	Yell	22600	25850	29050	32300	34900	37450	40050	42650


**	HUD Reviews the income limits annually for all 75 counties

Current with amendments received through February 15, 2024. Some sections may be more current, see credit for details.

Ark. Admin. Code 109.03.4-B, AR ADC 109.03.4-B

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